Cell-cell signaling plays important roles in vertebrate embryonic development. We are interested in the mechanistic understanding of Wnt and hedgehog signaling pathways in the control of vertebrate embryonic development, in particular, limb development and skeletal morphogeneis. Early in limb development, signaling molecules which include the Wnt and hedgehog family members determine where and when the late structures, i.e., skeletal elements will form. Skeletal morphogeneis in the limb occurs through endochondral bone formation in which chondrocytes (they form the cartilage) and osteoblasts (they secrete bone matrix) are differentiated from mesenchymal condensations. This is followed by sequential proliferation and maturation of both chondrocytes and osteoblasts, which are tightly regulated and coordinated to ensure proper morphogenesis of the skeletal system. Through analyzing mutant mice in which Wnt and Hh signaling components are either inactivated or ectopically expressed, we have uncovered previously unexpected roles of Ihh signaling in synovial joint formation and the essential function of Wnt/beta-catenin signaling in regulating chondrocyte survival. More importantly, we found that Wnt and Ihh signaling interact with each other in distinct ways to control osteoblast differentiation, chondrocyte proliferation, hypertrophy, survival and synovial joint formation in the developing endochondral bone. Beta-catenin is required downstream of Ihh signaling and Osterix expression for osteoblast differentiation. But in chondrocyte survival, beta-catenin is required upstream of Ihh signaling to inhibit chondrocyte apoptosis. In addition, Ihh signaling can inhibit chondrocyte hypertrophy and synovial joint formation independently of beta-catenin. However, there is a strong synergistic interaction between Wnt/beta-catenin and Ihh signaling in regulating synovial joint formation.